OSLO (Reuters) - Faroese fish farmer Bakkafrost (BAKKA.OL) has agreed to buy a 68.6% stake in rival The Scottish Salmon Company (SSCOM.OL) from Northern Link Ltd and will bid for the remaining shares, Bakkafrost and The Scottish Salmon Company said on Wednesday.
The planned transaction, valuing Scottish Salmon at 517 million pounds ($639 million), will allow Bakkafrost to cut production costs by utilizing greater economies of scale at a time of declining salmon prices.
Both companies are listed on the Oslo Stock Exchange, a unit of Euronext.
To fund the purchase, Bakkafrost plans to sell 7.33 million new shares to investors, which, if sold at Wednesday’s closing price, would raise some 3.87 billion Norwegian crowns ($428 million).
Reporting by Terje Solsvik; Editing by Kirsten Donovan